Sears 2006 Annual Report Download - page 99

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Quarterly Items:
(1) The fourth quarter of 2006 includes: (i) $27 million in pre-tax losses ($0.11 per diluted share) on the
Company’s total return swap investments; (ii) pre-tax gains of $50 million ($0.20 per diluted share) on the sale of
assets; (iii) a tax benefit of $25 million ($0.17 per diluted share) related to the resolution of certain income tax
matters and (iv) a pre-tax charge of $74 million ($0.29 per diluted share) related to an unfavorable verdict in
connection with a pre-merger legal matter concerning Sears’ redemption of certain bonds in 2004. The fourth
quarter of fiscal 2006 included 14 weeks.
(2) The third quarter of 2006 includes (i) pre-tax gains of $101 million ($0.42 per diluted share) on the
Company’s total return swap investments and (ii) $6 million of net income ($0.04 per diluted share) related to the
resolution of certain income tax matters. The third quarter of 2005 includes $59 million in pre-tax charges ($0.13
per diluted share) for merger-related restructuring activities.
(3) The second quarter of 2006 includes (i) a $36 million pre-tax gain ($0.14 per diluted share) representing
the Company’s portion of proceeds received related to the settlement of Visa/MasterCard antitrust litigation. The
second quarter of 2005 includes $42 million in pre-tax charges ($0.16 per diluted share) for merger-related
restructuring activities.
(4) The first quarter of 2005 includes an after-tax charge of $90 million ($0.58 per diluted share) for the
cumulative effect of a change in accounting for certain indirect overhead costs included in inventory.
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